The Karnataka High Court has granted anticipatory bail to Mysuru-based trader Sri Akram Pasha, who was facing possible arrest in a major Goods and Services Tax (GST) investigation involving alleged fake invoices and wrongful input tax credit (ITC) claims exceeding ₹31 crore.
The order was passed by Justice Shivashankar Amarannavar on December 19, after reserving the matter for orders earlier this month.
Background of the Case
The case arose from an investigation conducted by the Directorate General of GST Intelligence (DGGI), Bengaluru Zonal Unit. According to the department, intelligence inputs suggested the existence of a syndicate involved in creating bogus firms and issuing invoices without actual supply of goods.
Akram Pasha, proprietor of M/s A.R. Steel, was accused of availing fraudulent ITC using invoices allegedly issued by non-existent or cancelled entities. The department claimed that coordinated searches were conducted at 13 locations in September 2025 and that the petitioner failed to appear despite repeated summons issued under Section 70 of the CGST Act.
Fearing arrest under Section 69 of the Act, Pasha approached the High Court seeking anticipatory bail after a similar plea was earlier rejected by a sessions court in Bengaluru.
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Arguments Before the Court
Senior counsel for the petitioner argued that the maximum punishment for the alleged offences under Sections 132(1)(b) and (c) of the CGST Act is imprisonment up to five years, making it neither a heinous nor a life-imprisonment offence.
It was pointed out that GST adjudication proceedings by State authorities had already concluded, with assessed tax amounts having been paid. The defence also stressed that GST offences are compoundable under law and that arrest is not the primary objective of tax legislation.
On the other hand, the DGGI opposed bail, describing the case as a serious economic offence involving fake invoices, large-scale tax evasion, and non-cooperation with the investigation. The department insisted that custodial interrogation was necessary.
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Court’s Observations
After examining the statutory framework and judicial precedents, the Court noted that while economic offences are undoubtedly serious, the GST law itself limits the maximum punishment to five years in such cases.
“The offence does not contemplate punishment for more than five years, nor does the statute mandate custody as a sine qua non for investigation,” the Court observed.
The judge also took note of the fact that GST offences, barring limited exceptions, are compoundable, and that there is no express bar under the CGST Act against granting anticipatory bail.
Relying on earlier decisions, including Supreme Court rulings emphasising that “bail is the rule and jail the exception,” the Court said arrest should not be used mechanically when cooperation can achieve the purpose of investigation.
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Decision
Allowing the petition, the High Court granted anticipatory bail to Akram Pasha in the event of his arrest. The Court directed that he be released on a personal bond of ₹5 lakh with two solvent sureties of the same amount.
Strict conditions were imposed, including cooperation with investigators, non-tampering of evidence, surrender of passport, continuous availability on mobile phone, and restriction on travel outside India without permission.
The Court clarified that any violation of these conditions would give the authorities liberty to seek cancellation of bail.
Case Title: Sri Akram Pasha v. Senior Intelligence Officer, DGGI
Case No.: Criminal Petition No. 15066/2025
Case Type: Anticipatory Bail under CGST Act
Decision Date: 19 December 2025
